Why has the UK stock market become less attractive? Strictly Business

Jeremy Hunt has quite a task ahead in unleashing his high tech ambition for the UK.

The Chancellor has sought to lift the spirits with high flown rhetoric about Britain’s world leading achievements in life sciences, deep technology, AI, Fintech and much else. 

But he faces a tormented backdrop with the decision by £30bn tech champion Arm to list in New York, along with business lender OakNorth and data group WANdisco. 

The grass looked greener on the other side of the Atlantic before the collapse of Silicon Valley Bank.

This is just the tip of an iceberg. As we learnt in the pandemic (with no exaggeration) Britain is genuinely a world beater when it comes to biotech, developing vaccines and new medicines.

Many UK discoveries turn into start-ups and then race towards Stage One approval in the regulatory process. 

That indicates a prospect of success. Then the fun begins with small biotechs looking for direct finance and big pharma seeking licencing deals to capture the new treatments or compounds.

Realistically this is a hit or miss process with only a one in ten chance of success.

Nevertheless, the competition is hot and at this point you can almost hear the whoosh of great science, developed in UK universities, heading to Stanford and the US’s West Coast. American venture capital is so much more willing to take the risks than British funders.

Yet we have one of the world’s great pension fund endowments, holding some £10bn of assets, which could be used to support home grown enterprise

HM Treasury recognises the value of companies emerging from our brilliant research universities. The Chancellor has set up a task force headed by Professor Irene Tracey of Oxford and Dr Andrew Williamson of Cambridge Innovation to identify ‘best practice’ in turning university research into commercial success.

This looks to be typical Whitehall with civil servants focused on process rather than outcomes. Of course there is huge room to turn university research into new enterprises. This stuff is already going on at Russell Group universities such as Southampton.

It has created enormous science hub where dozens of innovations have been turned into firms.

Investment manager M&G is seeking to be a pioneer in this space through Northern Gritstone which provides funds for promising spin-outs.

Its £5bn Catalyst Fund is now being opened to external investors for the first time and is hungry for investment targets. 

Tory voices, such as Howard Leigh of Cavendish, argue that if the UK really is to become a beacon for start-up funding then mechanisms such as the tax advantaged Enterprise Investment Scheme need to be modernised and extended.

The government still lives in fear of fiscal turbulence after the Truss fiasco last autumn. 

However, the UK cannot recover its mojo without generous tax breaks and a change in attitude among defensive domestic investors towards more venture capital.